Aar Corp. · NYSE:AIR
Aar — Investor Presentation (September 2017)
18 slides from Aar's investor presentation, Sep 7, 2017
Slide 1: Forward-Looking Statements
Forward-Looking Statements This presentation includes certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on beliefs of Company management, as w
Slide 2: Established Player Serving the Global Aviation Services Market
Leading provider of Aviation Services and Expeditionary Services to commercial and defense/government markets NYSE: AIR $1.8B revenue stream Over 60 years as a market leader in aftermarket aviation support Over 4,800 employees in over 20 countries Close-to-the-customer business model Established Pla
Slide 3: Key Investment Highlights
Commitment to Strong Shareholder Returns Leadership positions in value-added services markets Long-term favorable aftermarket growth trends Diversified, global base of commercial and government customers Fortress balance sheet with substantial available liquidity Focus on cash flow generation and op
Slide 4: Company Overview
Company Overview Supply Chain ~67% of segment Aviation Services (~84% of sales) Airlift ~63% of segment Mobility ~37% of segment Expeditionary Services (~16% of sales) Fixed and Rotary Wing in Austere Environments Flight Operations, Maintenance, Logistics for COCO and GOCO Search and Rescue MRO ~33%
Slide 5: Aviation Services Supply Chain
Buying, selling, exchanging, and leasing overhauled airframe and engine parts > 1 million parts stocked Aircraft and engine end-of-life solutions Inventory consignments Technical services including inspections and work scoping for repairs Parts Trading Sales and marketing partner to extend OEM reach
Slide 6: Aviation Services MRO Close to the Customer
Indianapolis Miami Duluth Rockford Oklahoma City Airframe Maintenance Facilities #1 MRO of the Americas > 5 million Man hours 850 aircraft maintained, repaired or overhauled Aviation Services MRO Close to the Customer
Slide 7: Expeditionary Services
Airlift Mobility Rotary & fixed wing flight operations Austere environments Search & rescue Personnel, cargo, combi, and external cargo capable Day, night, & all-weather operations Shelter systems – Transportable by air, land and sea and patented for rapid on- and off-loading ISU containers – Custom
Slide 8: Reshaping Airlift in FY2018
Transition from COCO (Contractor Owned, Contractor Operated) model to GOCO (Government Owned, Contractor Operated) model and focus on long-term contracts Build a more robust asset management platform for rotary-wing aircraft that complements our existing strength in fixed-wing assets Reshaping Airli
Slide 9: AAR Global Presence
Customers in over 100 Countries Over 60 Locations around the world AAR Global Presence Strategically Located in Close Proximity to Key Customers
Slide 10: Strong Industry Relationships
Airlines Cargo Airlines OEMs Governments Regional Airlines Strong Industry Relationships (Representative List)
Slide 11: Navigated Through Five Major Industry Cycles
Arab Oil Embargo Fuel Crisis Conflicts in Iran Economic Downturn Gulf War September 11 Attacks “Great Recession” 10% CAGR Sales ($B) Sale of Telair Cargo Group Navigated Through Five Major Industry Cycles After Each Down Cycle, AAR Has Emerged as a Stronger Company
Slide 12: AAR Strong Financial Position
Strong business fundamentals in Aviation Services INL/A award by Department of State Improved outlook for Expeditionary Services Strong balance sheet to support internal and external growth opportunities AAR Strong Financial Position
Slide 13: Balanced Capital Allocation
Organic growth through investment in new programs and opportunities Future growth through strategic acquisitions Committed to returning capital to shareholders ($226M in dividends and share purchases since March 1, 2015) Organic Investment Acquisitions Return of Capital Balanced Capital Allocation
Slide 14: FY2017 Highlights
Revenues were $1,767.6M in FY17 compared to $1,698.9 in FY16, an increase of $68.7M or 4.0% over the prior year Gross Profit increased by $38.6M or 4.2% vs. prior year Diluted EPS from continuing operations was $1.45, exceeding last year by 32% Balance Sheet Remains Solid with $366M of Availability
Slide 15: FY2017 Segment Results
Prior Year Variance in millions FY 2017 FY 2016 Better / (Worse) Sales $1,485.4 $1,425.1 $60.3 Gross Profit $246.2 $229.8 $16.4 % Margin 16.6% 16.1% 0.5% Aviation Services Prior Year Variance in millions FY 2017 FY 2016 Better / (Worse) Sales $282.2 $273.8 $8.4 Gross Profit $30.3 $8.1 $22.2 % Margin
Slide 16: Key Financial Goals
Organic sales growth of 5%-10% Earnings per share growth of 10%-12% SG&A as % of sales < 10% Year-over-year improvement in ROIC Working capital turnover of 3.5x – 4x Key Financial Goals
Slide 17: Share Price Outperformed Peers and S&P500
Source: IR Insight. (1) S&P Aerospace and Defense Select Industry Index (2) Market data as of September 1, 2017 Recent announcements have resulted in positive share price performance AAR has outperformed its peer group and the S&P 500 over the last twelve months and fiscal year Share Performance LTM
Slide 18: Share Performance
are Price Outperformed Peers and S&P5! Share Performance © Recent announcements have resulted in positive share price performance AAR 38% 43% & AAR has outperformed its peer ) RSS 5 abs group and the S&P 500 over the last S&P 500 14% 15% twelve months and fiscal year AAR ere .